What's Going on With Our Economy? | Ep 051

Kacie: This episode, this is going to be a two episode. Series and this episode we're gonna just talk about, you know, personal debt and the state of the economy and just kind of an overall big picture on how everything's looking. And then the next episode next week, we're going to dive down into businesses.

The Business Project Podcast. Business 

John: can be complicated. 

Kacie: We break it down so regular people like us can 

John: understand and find success. I'm John Crespo, accountant and consultant. 

Kacie: I'm Casey Bryant, marketer and event planner. If you run a business or want to run a business, 

John: welcome to the show.

What's up? 

Kacie: Welcome back everybody to another episode of the Business Project Podcast. Yes. We kind of have some gloom today because the economy, if you guys haven't noticed, is a little gloomy and we're going to kind of get into that and this episode, this is going to be a two episode series and this episode we're going to just talk about, you know, personal debt and the state of the economy and just kind of an overall big picture On how everything's looking and then the next episode next week, we're going to dive down into businesses, how it affects businesses, and we'll kind of, it's going to go kind of down this one and then it'll start down and then we'll bring it back up at the end of next episode.

John: It's a necessary conversation though. Um, you know, we, we see it every day here in on Main Street, you know, the effect that the economy is having on businesses. So, you know, it's definitely a topic of discussion that needs to be had. We need to listen to it, we need to be aware of it, and we need to figure out what to do to overcome it.

Um, because that's, as business owners, that's just our livelihood, it's what we have to do. Right? And it's a shame that, like you said earlier, when we were about to, when we were getting ready to record, it's like, it's so hard to find, like, true economic data about what's going on in our economy. Um, from just the regular media sources, so, you know, we have to, we know it, because we feel it.

So if we talk about it, then hopefully it gets out there a 

Kacie: little bit. Yeah. I was actually doing some research over the past week or so. I've been kind of debating back and forth if we wanted to cover this. Because it is, you know, our podcast is typically positive and uplifting and giving you applicable things that you can do.

And so I started doing research on this and really, I mean, you know, all the... Search engines bring the fake news to the top, right? They bring all the stuff that's, um, sounds good or, you know, the click baity type things. And, and so it is really, really hard to find actual information on the state of how things are.

And, and so we've, we've done some digging and we personally have. Talk to lots and lots of businesses and so bring in some of what we're hearing on the streets and some of the research that we were able to find to you and in order to address situations, you know, we all talked, we talked about conflict the last couple series and conflict doesn't necessarily have to be a bad thing and this doesn't necessarily Have to be, you know, ruin your entire day.

Our purpose is to talk about it, bring it out into the open so that we can find solutions for it and work through it versus just shoving it under the rug. Cause that doesn't do any 

John: good. Yeah. Yeah. I mean, the, the goal is to hopefully get us to think strategically about our businesses and how we can pivot because, uh, you know, this is going to bring up the conversation of how are we going to pivot?

How are we planning to pivot? Um, we spoke about it pretty much similar. Topic and previous podcast like overcoming failure, you know, the the ability to pivot is gonna be important here But just first and foremost is understanding what we're dealing with Yeah, right and bringing that up to the forefront so that we can then take that information and figure out How to 

Kacie: do with it.

Yeah. Mm hmm. So let's get into it. Yeah, excuse me. Um, Let's get into some statistics first. Some personal statistics. Yeah. How people are doing personally. Um, which impacts the economy and impacts small businesses because if people don't have money to spend personally, if they're worried about how they're going to pay their power bill and buy groceries, they're not going to be buying Nike shoes and I don't even know what the fancy shoes are these days.

Jordans. Jordans. And diamond earrings, you know. So, um. Let's talk about, I got some statistics here. 57 percent from whatever I saw that, you know, it was anywhere from 57 to 60 percent of people are living paycheck to paycheck. And what that means is if their washer machine were to break or if they were to blow out a tire on their car or their transmission, they wouldn't be able to come up with a thousand dollars to help in an emergency.

That's 60%, 57 to 60 percent of people. Yeah. I mean, that's over half of the people that were passing in the streets. are living paycheck to paycheck. So if their next paycheck stops, they don't eat. 

John: Yep. You know what's a, a similar statistic to that, that I, that I heard? I don't have the actual numbers here, but, you know, during the pandemic, there was a lot of, um, free money that was going out to everyone, right?

Everyone was loving those paychecks that were coming in. You had the child tax credit that was being paid out on a monthly basis to people. You had all of the, um, Like the post, the pandemic credits that checks that were sent out as well. So a savings, the savings of people during that time was really high, but there's news and I, and I'll share it in the next one.

Right. But there's news out there that all that money by the end of October this year. So I think that 57 percent is going to go up. 

Kacie: Yeah, probably. I'm sure. Another thing, another thing that that affects is that means that they're not saving for retirement. Yep. So these younger, this younger generation that's living paycheck to paycheck, they're not investing in a house because a lot of them are still renting, and they're not saving for retirement.

So that's going to have a big impact down the road. Yeah, and I think it is important to think these things through long term So not just how is it impacting us now, but how is it going to impact us, you know, 50 years from now? That's 

John: true. You have the younger generation Staying home longer because they're concerned about the economy, you know They can't purchase a home or rent a an apartment because those the rental prices are so high and home prices have skyrocketed So, um, you know you have that going on as well.

That's Providing pressure to the families to, you know, you have to, you know, support your whole family for a longer period of time. You know, the goal is to hope to raise your children so that they can go and start putting their roots in and creating their own families. But they're staying home longer.

Yeah. Because of the uncertainties that they're coming up with. So, you know, that, all of that is playing into effect. You got the increased interest rates. Right? So people, people aren't buying houses now because it's so expensive to buy a house. So the housing market is, is taking a hit. You're not buying food because food prices are high, right?

So people aren't shopping as much because they can't afford the food prices. Gas was ridiculous. I just did a video the other day where, um, I went to fill up my tank. I haven't filled up my tank in a while and I said, I'm just going to fill it up this, I'm going to fill it up today. I don't know why I did that.

I'm sitting at the gas station and I see the The meat the ticker going up keep going and i'm like You don't have that big of a car either. I don't my take is not that big and i'm like, oh 50 bucks For and I know it's way higher in other parts of the country than it is here. Like we're pretty Our gas prices are pretty reasonable, but you know, I can't, I just can't think of somebody in California filling their gas tank when it's like six, 7 a gallon over there or in New York and New Jersey where it's like five, 6 a gallon.

That's 

Kacie: crazy. Yeah. Well, and think not just on a personal level, but these truck drivers that are having to drive supplies and I mean that gas prices affect everything. It a price, it affects the price of everything. Yep. Yeah. 

John: There is a, a graphic, um, that I saw. Uh, on Facebook yesterday, and it showed the value of a dollar or the value of $20 or the, how $20 has changed, right?

From 1998 to 2023, and it showed, you know, the dollar, the $20 bill, they've changed the, the, just the way it looks. Mm-hmm. since then. So they, they go into d the different years and it's, it, you see the look, but underneath there's a shopping cart as well, right? So it showed you what $20 bought. In that year within the way it looked and then and all the way to 2023 and the in 2023 the shopping cart is empty

Right, it was like something really tiny in that shopping cart you go from a pretty Decently sized filled shopping cart in 90 something to a pack of gum in 23 in the shopping cart And it's like you have to put that into perspective. Yeah, you know like that Is affecting the the inflation the way inflation is just skyrocketing is affecting Affecting what we can buy and how we're spending money now.

Yeah, it's 

Kacie: crazy. It's crazy I have I saw another graph and I have it right here and how much Net how much dot net i'm guessing is where this is from. It's an image But it has the student loan debt has gone up since 2003 to 2020 546 percent Look at that graph. We'll put it I'll put it somewhere so y'all can see it or I'll link to it in the notes so you can pull it up since when Um from 20 from 2003 to 2020 student loan debt went up 546 percent I bet that's even more now.

John: I think these universities are a racket. Oh, 

Kacie: it's insane It's so crazy again the smaller generation the younger generation. I mean, this is gonna have a huge I mean, there's so many college students that are graduating with 100, 000, 200, 000, 300, 000 in debt, and then they get a 10 an hour job. They think they should be making millions, but they don't have the work experience yet.

John: And you know, they're graduating with 100, 000 in debt on a liberal arts degree. Yeah. So let's put that into perspective, right? So let's say you just go to college just to go to college because everybody tells you you gotta go to college. Right, they've been pushing that narrative for so long. You got to go.

You're not going to be anything unless you go to college, right, so People everybody has been for decades pushing people pushing kids to college that aren't don't necessarily Shouldn't really honestly shouldn't be in college. They should be figuring out either Entrepreneurship a trade or just working, right?

So these colleges have been have taken advantage increase their prices increase their tuition prices While getting money from the government as well. These are public institutions getting money from the government to fund education, right, fund colleges, but they're increasing their tuition rates. You know what I mean?

It's like... Don't get me started on it. Yeah. He's right. I feel they need to be held accountable for the way they're price gouging our students. 

Kacie: Well, and I can imagine this is going to hit a bubble eventually, because if we have all of the 546 percent increase in debt and student loans, and we have all of these students aren't getting jobs that are paying enough to pay back their student loans.

Plus the, the cost of their living is skyrocketing. There's, it's got to pop eventually. Like you can only do that for so 

John: long. Yeah. And I think we're at that point where the pop is about to happen. Like there's a, the pin is about to touch the balloon right now. It's like right there. Yeah. It's just like putting, it's applying the pressure right now.

It's going to get ugly. 

Kacie: So let's get into a couple more numbers from this graphic. The auto loan, um, debt has gone up 114%. For auto loans, 114%. 

John: You know, that's a good, that is a good thing right there. I was remembering back to when like 21. 2021, 2022, when you couldn't get a car. Oh, yeah. Remember that? They were missing all the pieces.

They were missing all the pieces. The lots were empty. So the car dealerships, there was obviously demand for vehicles, right? Because people had money. Everybody wanted to buy something, right? So they were jacking up the prices on these cars. So the average loan for a car right now is like 35, 000 to get a, an economy car.

You know, like a little, what are those Toyota, the little tiny Toyota look like matchbox cars. It's going to be like 30, 000 for one of those, you know, when you, not even 10 years ago, you'd have gotten it for like 15, 000. And, that now. But believe it or not, you look at the car dealerships, the car lots now, they're overflowing with cars and nobody's buying it because they can't afford it.

And the interest 

Kacie: rates are up too, which makes the cars even more expensive. Nuts. Yeah, 114%. And I think with both of these, with both the college and the auto loan, even, I mean, all of these that we're about to get into, I think that a lot of people just buy them to impress others. It's not even because they want a fancy car, but they get a nicer car because They wanna impress the money, keep up with the Joneses.

Exactly. Yeah. And so it just creates this whole funnel. So, um, mortgages have gone up 103% 103% mortgage debt. 

John: I mean, we, that, that's already, that is news, right? That's news that easily defined because you go from 2% mortgage to a mortgage rate, like 2%, two and a half percent to line with like 8%. . Um, on a good credit score, you're gonna be like seven to 8% on a mortgage.

Who can, who can afford a house? Yeah. You're going 

Kacie: from, and now it's at like Yeah, seven or 8%. Yeah. We got one three years ago, four years ago. Uh, a 3% interest rate. Yeah. And now we just got another one and it's like 8%. Yeah. It's so crazy. And you look at that amount of money, Yeah. 

John: How much is, does the mortgage payment change?

A lot. When an interest rate is like that. Yeah, it's a lot. So, it's basically doubling your mortgage payment. Mm hmm. For nothing. Or even more than doubling. Mm hmm. So, for a two bedroom, let's say a three bedroom, two bathroom house, right, that was maybe 200, 000 in our area, right, a couple years ago. Now that house is like 300, 000.

but the mortgage rate instead of being 2% is now 8%. So not only is the house being more expensive right now, you're paying more on top. Can't of it. But you can't get them. Yeah. Mm-hmm. like, so it's like you're going from a $800 a month mortgage payment to a $1,800 a month mortgage payment on the same house.

It it, how do you do other things? Yeah. 

Kacie: Yes, so we will, I'll post this. There's a couple more on here. I'll post this graphic, a link to this graphic in the show notes, so you guys can dig a little bit more into it. But overall, it's not looking good y'all. Yeah, it's not. You guys know all of this though. You know all of this and you were gonna talk about, bring up something else you were talking about that happened in the We talked about it before.

Do you remember? 

John: My mind is on this stuff right now. I'm like, what were we talking about before? 

Kacie: Yeah, before we started our podcast, you were gonna go into something specific. 

John: Yes. Um, oh! So we're talking about more macro, right? Where in the next week, we're gonna go more micro on how it's affecting, um, the small businesses now.

But, um, so we have to look at really The news that is not being shared is, you know, what is going on on Main Street that's not being told on our Main Street, our main news media channels. Um, so you have... The, uh, the, was the, the chairman of the Federal Reserve was in Pennsylvania on Monday and, um, 

Kacie: And this episode is going to come out, not right away, so this would have been a couple weeks ago.

Oh yeah, 

John: on October 2nd. Right, okay, go ahead. So October 2nd, the chairman of the, I forgot that we're, we're filming ahead. The chairman of the Federal Reserve, Jerome Powell, was in Pennsylvania and he got to meet with some businesses. And the biggest issues that are going on right now is, um, inflation, right?

Lack of employment. Lack of workers. And I want to talk about that a little bit. Lack of workers. And, um, the, I have it right here. As a matter of fact, I wrote it down. Yeah, go for it. Yeah, so it's, uh, okay, here we go. Trouble finding workers, higher interest rates have discouraged some of them from expanding, higher costs and chronic difficulty in acquiring enough supplies.

So, we look at when COVID, we were dealing with COVID, right? A lot of this started during that time, right? Um, like 21 is when it really kind of like compounded, where you couldn't get access to anything. Right. So that just started the crazy inflation. People had to increase their prices because there was nothing, there was nothing coming in to replace what you're selling.

Right. So, um, in order to kind of like meet demand, you had to increase prices to kind of like be able to sell. Supply and demand. Yeah, supply and demand. So this just basic economic, um, Um, process cycles, what I'm trying to get with it, what I'm trying to get with this is it creates a trickle down effect, right?

So you have to look at why are we in the position that we're in now? We're in the position that we're in now because of these policies that are put in place that affect the, the movement of goods. On its way down to the small business that has to then deal with the Local economy and trying to sell their goods, you know Yeah, 

Kacie: because most of the small businesses get their supplies from other places most of what we sell here Doesn't come from here.

It comes from China. It comes from other states. It comes from... So, there lack... You know, those prices go up it affects prices here. Or if they're not able to get something it affects here. It's all a chain. That's what you're saying, right? 

John: Yes. Yep. That's exactly what I'm saying. I'm glad you were able to put it that way.

But, so, you know, it's like... Oh, man. I was watching a, a video not that long ago. I'm, I, I I'm deep into, um, YouTube videos, right? And podcasts that talk about economy, and they talk about this state of business and just, and, and other things that we don't get from doing mainstream searches. So, and I'm, and in the, in the video they're talking about, um, you know, why.

Are we continuing to allow our country to move the way it's moving and no one's really doing anything to stop it? You know, it's like, what's the purpose? Why? Why? Why is our government not seeing what's going on? Um, or they're seeing what's going on, but not doing anything to stop it because both sides are corrupt.

Both sides are corrupt. Yeah, 

that's 

John: my opinion It's like us against the world right now. So Main Street is against the world Yeah, we have to we have to deal with our corrupt Politicians our government that's just so the dysfunctional right because and they're so disconnected So what's going on right now is we have a disconnected Disconnected government That's creating policy that's not truly, um, enabling the growth of Main Street, which is the backbone of our country.

Right. We employ the most people. Mm hmm. We, we bring the most money. 

Kacie: We, yeah, we hire the most people. Did you just say that? Yeah. 

John: We hire the most people. Yeah. You know, we, we deal, we, we have true, we truly affect our local economies. The larger organizations, they're more global. All these large organizations, they're multinational corporations.

So the money doesn't, doesn't stay local. It goes across the world. Yeah. 

Kacie: And it goes into the pockets of these people that do things that we don't agree with. Right. Yeah. 

John: So it's like, well, you know, what do we need to do? And I think the next, the next episode we'll actually get into some, some ways on, on how it's affecting us and things that we need to do to kind of like Survive.

Kacie: Yeah, how we can all stand up instead of being quiet. We're not we're not useless. No We don't have to put our heads in the sand 

John: and collectively we have a voice. Mm hmm you know collectively the small business community has a voice and I think we have to Start looking at how we can make that voice louder, right?

Or we're going to get trampled. We're going to get trampled. We're going to continue to get trampled the way we have been. Every economic cycle, the most, the most people that are affected are Main Street America. So And 

Kacie: they're not going to save us y'all. They're not. We've got to save ourselves. 

John: Yeah. I mean, we had to dig extra deep just to find some information on what's affecting Main Street.

It's kind of crazy. Yeah. Yeah. So it's like, no one's, no one's talking about it. And it shows how disconnected they are. So we need to talk about it. Yeah. We ain't scared. What are you doing? What are you seeing? Talking to you guys out there. Yeah. What are you guys seeing around your community? You know? Uh, are you opening your doors and are you going out there and you're talking to your fellow small business owners and just, you know, seeing what's going on in your community?

That's really how you're going to find out what you know, what the money flow is like. 

Kacie: We just recently, in the past two weeks, had four local businesses close that had been open for a long time. It wasn't just like brand new businesses. 

John: Good ones, yeah, like surprising. 

Kacie: Yeah, very surprising. Four of them, just in the last two weeks.

I did a post on my Facebook to just... Asking businesses in a group, asking them how they were doing. I'm like, y'all, let's get a temperature check because nobody's talking about it. And I know y'all are having a hard time and it's not just financially, it's mentally, it's, um, you know, so much impacted in our personal life and our health and just a lot going on right now.

I feel like so heavy and I asked and it just like exploded. 

John: People are, because we're like in, in our silos as small business owners, we're like in our silos. So when we have an opportunity to, you know, unleash, we just, you know, let it all out. We're just trying to survive ourself. Exactly. Yeah, for 

Kacie: sure. Let alone to think about bringing other people 

John: in.

Yeah. So I'm excited about next week because you know, we're going to talk about us. We're going to talk about the small business and we're going to talk about how we're being affected. And then we're going to talk about. What can we do to overcome this? Because I think the more we talk about how we can overcome, um, these economic cycles that we're forced to go through, because a lot of this is caused by these bureaucracy agencies that are supposed to be managing our, our economy.

You know, managing inflation. Um, you see how inflation hit us? You know, and that's supposed to be helping our economy. So how do we navigate that as a small business owner? 

Kacie: We're going to turn your frown upside down next week. 

John: Well, it's going to start as a frown though. Yeah. It's going to start as a frown.

Yeah. And hopefully we end with a straight face instead of a frown. Yeah. 

Kacie: At least. That's the goal. We also did an episode a little while back on things you can do as a business to recession proof your business. Remember that? So that's a good episode. We'll, we'll have a bunch of links in the show notes for you guys for this one so that you can go back and get some other good information to help you stay positive.

John: That's right. That's what we're here for. It's, it's the small business journey. Yeah. All right, the business project is about the small business journey. It's all about you guys. The good, the bad, the ugly. 

Kacie: All right. We will talk to you next week. Are you super excited and ready to go? I'm thinking

John: like, oh, turn it off, turn it off.

Yeah. 

Kacie: All right. We appreciate you guys for watching and we look forward to next week. It's going to be a great conversation. We hope that you will join us and put in the comments. We want to hear from you if you're having, you know, your sales are better than ever or if you're. Kind of having it rough if you're having a hard time attracting customers or getting loans or if your supplies have tripled or if your sales are down.

We want to see that from you guys in the comments. Let's kind of link arms and figure out how to move forward together. Yep. 

John: Yep. Let's do it. All right. See you next week.